In todayâs fast-paced real estate market with multiple offer situations and properties going under contract almost as soon as they are listed, it is becoming increasingly difficult for agents to determine the most likely sales price when preparing a BMA for a potential relocation listing.

Photo: Andy Dean Photography

In todayâs fast-paced real estate market with multiple offer...

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First-time and move-up buyers are among those benefiting from the housing environment in Houston.

Mortgage reform, recession, interest rates, inventory, appraisals - the business of buying a house seems to be more complicated than ever.

But some things are simple, such as the fact interest rates are lower than they've ever been, said Peter Beanland, Texas and Kansas regional sales manager for PNC Mortgage.

"There's been volatility over the last several years, but rates are at an historical low and they continue to propel the Houston market forward," Beanland said. "We don't expect rates to rise dramatically over the next year or so. If they do rise, it will be a gradual increase."

But because of mortgage reform, some things are a little more complicated, or, as Beanland said, different.

"It's not easier or harder to get a mortgage, it's just different," he said. "The reform has brought us back to center, where we're asking for documentation that should normally be expected.

"Even those who have gone through the process in the past are finding it different. Part of our education is to equip Realtors and consumers alike with information on documentation requirements, and helping understand that the shift in the industry is causing us to look at lending differently than we did in the past."

Earlier this year, the Consumer Financial Protection Bureau released a series of rules intended to clean house when it comes to mortgages. For one, lenders must consider a minimum of eight specific criteria to determine the borrower's ability to repay the loan.

Quicken Loans Chief Economist Bob Walters said what is different today is that lenders are more exacting on documentation required to get the loan.

Basically, lenders want everything on paper. This protects both lender and borrower, Walters said, so be prepared to provide a two-year history of employment, tax returns if you're self-employed or work on commission, and if you're transferring into H-town, a letter from your new employer confirming salary.

"There's a lot of talk about how mortgage credit is tight," Walters said. "But that's not necessarily true. You can still put down as little as 3 or 5 percent, and as long as you're employed and you've been paying your bills, you should be able to get a 30-year mortgage without a significant challenge."

Additional CFPB rules concern something called "qualified" mortgages, which basically means no fancy features such terms lasting longer than 30 years, and borrowers cannot have a debt-to-income ratio higher than 43 percent.

There are two types of buyers profiting from today's housing environment in Houston, Walters said: first-timers and those looking to buy up.

But the competition they face are the folks ponying up to the table with cash in hand. To stay in the game, Walters recommends borrowers be preapproved for financing, not just pre-qualified.

"Preapproval means verification of credit, assets and income," Walters said. "It means a buyer can make an offer subject to appraisal and title. The money part has been verified. So look for a lender that will do that work and stand by it."

Whether it's cash or loan, a potential obstacle for buyers is a gap between appraised value and offer, something that Walters said happens more often than it used to. Buyers need to be prepared to cough up more dough or renegotiate with the seller.

Before any buyer seals the deal, Walters urges due diligence. While that payment on paper most likely includes principal, interest and taxes, remember that home ownership costs quite a bit more - especially in Houston, where air conditioning runs 10 months of the year.

Indeed, Houston is hot, but not only in climate. Beanland said Houston is at an all-time low in terms of inventory, with only a 3.7-month supply. This, combined with affordable prices and low interest rates, makes Houston a buyer's dream.

"Newcomers to Houston can capitalize on that," Beanland said. "I think we're relying on the housing market to bring the economy back to stability, and Houston plays a big role."

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